Investing in the Future with IoT

The Internet of Things: the process by which physical objects are connected to internet systems, forming a network of connected devices. Powering it are various forms of technology enabling two or more devices to communicate wirelessly through the cloud, with limited human intervention. A range of systems and devices are responsible for controlling the exchange of data, including physical sensors which receive data, and digital software which sends commands.

IoT technology was born in the late 1990s, and since then has grown from a niche curiosity for gadget heads to a fundamental part of the way we live, transforming our daily lives. Over the past two decades, IoT technology has dramatically changed our world, and with the knowledge we have now, it’s easy to predict that life will continue to be disrupted by technological advancements in the sphere.

IoT is Already Part of our Lives

IoT Applications

The Internet of Things is a part of daily life for many of us. We have IoT devices in our homes, from the ubiquitous personal assistants, connected toys, responsive lightbulbs and smart thermostats to the increasing proliferation of connected kitchen appliances such as smart microwaves and fridges. Many of us have wearable technology like fitness devices or health trackers, and before long we will be seeing driverless cars on the road.

Beyond the personal, IoT technology is transforming agriculture and industry, from crop-spraying drones to automated supply chain systems, smart cities, and environmental monitoring. The devices themselves operate over a range of different networks.

Wireless Networks

When we think of connectivity, we probably most often consider Wi-Fi, which connects most of the devices in our homes, or Bluetooth, which might connect our cellphone to a pair of wireless headphones or in-car navigation/entertainment systems.

However, there are many types of wireless network which can facilitate IoT technology, including the cellular network and Radio Frequency Identification (RFID). Other wireless options include Low Power Wide Area Networks (LPWANs) and Mesh Networks.

The IoT Market

From a business and investment standpoint, IoT is a growth market — in fact, it’s growing rapidly. Fortune Business Insights report that the market has an incredible compound annual growth rate of almost 25%. Estimates from Cisco Consulting Services indicate that by 2024 the IoT market will potentially generate $19 trillion, globally.

As a result of this, IoT investments are highly desirable, and the market is fiercely competitive. Many Big Tech companies including Apple, Microsoft, Google, Facebook, Dell and Cisco are all investing in the IoT market in a significant way. For example, Facebook has demonstrated a commitment to virtual reality (VR) and augmented reality (AR), powered by IoT, through its acquisition of hardware including the Oculus VR headset, as well as developing its own wristband and ‘goggles’ technology.

Transforming our Future Way of Life

The potential of IoT is limitless, and as the technologies continue to evolve, their practical applications have true potential to tackle global problems.

At its most basic level, IoT technology is the exchange of data, often one-way. But IoT now often encompasses multiple functions working in harmony; simultaneously sending, receiving, and analyzing data. To take a simple example, this means that rather than a smart thermostat simply switching the heating on or off based on the user’s activities, it will collect data from all users — which can be used to optimize the system or potentially inform on energy use more broadly. The future of IoT is going to be the story of how we learn to utilize the vast quantity of data it generates.

The technological environment needed to facilitate this is becoming established, and further advances are likely to accelerate thanks to increased network agility and the integration of more sophisticated artificial intelligence (AI) and machine learning. All this enables the development, automation, and deployment of a hugely diverse range of use cases, on a massive scale.

Practical Applications

Sometimes referred to as the ‘industrial internet of things’ (or IIoT) describes use cases across energy, manufacturing, construction, and other industries. This might include drone supervision on construction sites to reduce labor requirements, or sensors placed on heavy machinery to predict stress failures. The latter doesn’t just aid in preventative maintenance, but also, with the use of data analytics, helps manufacturers improve the durability of their machines.

Logistics was one of the first sectors where IoT technology became mainstream, with RFID devices helping companies track consignments in and out of warehouses and at checkpoints. With devices powered by battery, the tracking now often takes place continuously, with companies able to analyze supply chain efficiency based on the resulting data.

Farming has many practical applications for IoT. With remote moisture sensors installed across fields, and IoT-enabled irrigation systems, farmers can achieve far greater efficiency in water management; whilst vegetation analysis by drone coupled with targeted crop-spraying dramatically reduces expenditure in developing countries.

The benefits of IoT extend to our personal lives. One of its most powerful uses for society is in improving health care and the lives of seniors. IoT devices include wearable devices that track vital signs, and portable diagnostics devices, which operate as remote monitoring tools, reducing the disruption into patients’ lives as well as reducing costs and the burden on healthcare staff. Virtual home assistants and personal response systems for emergencies can also help to provide better care. Beyond this, there is exciting potential for remote surgery due to advances in haptics and human-to-machine interactivity.

More holistically, VR and other future technologies present ways to relieve the loneliness and mental health difficulties that some older people experience, through connecting them to family and friends, providing digital ‘companions’, and even ‘transporting’ them elsewhere without the need to ever leave home.

Opportunities for Investors

With its ability to generate tangible improvements to efficiency and productivity, IoT technology has the potential to radically alter our world — just like it did when it arrived on the scene over two decades ago. The acceleration of the enabling technological environment has created an IoT product ‘gap’ to be filled by innovation in the field, presenting a wealth of opportunities for tech companies — and, in turn, opportunities for investors.

Whether it’s finding a device which will become the next FitBit or Nest, or investing in AgroTech or drone technology that has the potential to quietly transform the way we produce food globally, there are opportunities everywhere for IoT investment. And of course, investments don’t need to be restricted to devices and hardware; there will be value in software companies that help to provide the technological environment required. Beyond this, another angle is to look to invest in AI, Big Data, and data analytics, all integral parts of the future IoT ecosystem.

In short, it’s impossible to ignore IoT technology as part of an investment portfolio. The Internet of Things is already transforming our future.